Management of Sugar Factories in Karnataka – an Economic Analysis
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Date
2015-06
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University of Agricultural Science, Dharwad
Abstract
Karnataka state is the fourth largest producer of sugarcane and third largest producer of sugar in the country acting as a major livelihood provider in rural areas. In recent years, Karnataka state witnessed considerable fluctuations in area and production of sugarcane, sugar output and sugar prices. Hence, present study was undertaken to understand the performance of sugar industry in Karnataka. The industry in the state was compared with that in other major sugar producing states. Further, the study investigated several dimensions of sugar factories in the state such as procurement, production and pricing of sugar and their financial strength and the problems faced by the factories and farmers to understand how sugar industry can be made more viable. Ten sugar factories were selected for the study with four each from private and co-operative and two from public sector. Farmers were also interviewed. The results indicated that Karnataka ranked first in capacity utilization, second in sugarcane yield and third in sugarcane area, number of sugar factories, crushing duration, sugar production and recovery percent. The analysis showed increasing trend in sugarcane price, sugarcane supplied to factories, sugar price and sugarcane production with growth rate of 8.39, 6.29, 5.48 and 2.10 percent respectively. For fixation of cane prices, all the factories took FRP as the base, while also considering sugar recovery percent, profits etc. With respect to procurement, production and financial management, all four private and two cooperative factories showed better progress compared to two below average co-operative and two public sector factories. Two major problems faced by the cane growers were unsatisfactory price paid by sugar factories and long waiting at the factory gate. The major problems of the factories were convincing the farmers for appropriate staggering planting of sugarcane, inadequate or excess cane supply and high cost of production of sugar.
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